Leerink Partners Cuts Price Target on DexCom (DXCM) Following 3Q
Leerink Partners maintained an Outperform rating on DexCom (NASDAQ: DXCM), and cut the price target to $100.00 (from $115.00), following the company's 3Q earnings report. DXCM reported revenue of $148.6M, ahead of the Street’s $146.6M. Higher OpEx drove EPS below expectations.
Analyst Danielle Antalffy commented, "DXCM shares could underperform today despite a 3Q16 sales beat given: (1) The company now believes the non-adjunctive dosing claim is likely an early 2017 event vs. before year-end; (2) Management highlighted confusion in the marketplace around competition, notably MDT's [MP] now-approved 670G set to launch in the spring 2017 as well as international pressure from ABT's [MP] Libre; and (3) The company spent more than expected, something we believe DXCM has been fairly transparent about. To us, none of this changes the long-term growth trajectory or the ~$6B + total addressable market opportunity for DXCM specifically and CGM broadly. DXCM reported 3Q16 revenue of $148.6M (+41%), ahead of our $148.0M estimate and the Street’s $146.6M. The top-line growth level remains above the high-end of management’s goal of 35%-40%, supporting our view that this level of growth should be sustainable for the next few years. And higher OpEx drove EPS below expectations, but this is largely due to a ramp in R&D expense related to G6 pivotal study and SG&A expenses associated with international expansion -- both critical for DXCM's long-term growth trajectory."
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Shares of DexCom closed at $77.92 yesterday.